ITEM 10 IJB Reserves Strategy 2025-26
North Lanarkshire Council · 21 May 2025
Back to IJB Performance, Finance and Audit Committee — 21 May 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
REPORT Item No: 10 SUBJECT: IJB Reserves Strategy 2025/26 TO: Performance, Finance and Audit Committee Lead Officer for Report: Chief Officer Author(s) of Report Chief Finance Officer DATE: 21 May 2025 1. PURPOSE OF REPORT 1.1 This paper is coming to the Performance, Finance and Audit (PFA) Committee for: For approval For endorsement For noting 1.2 This report provides an update on the review of the North Lanarkshire Integration Joint Board (IJB) reserves. 2. ROUTE TO THE INTEGRATION JOINT BOARD 2.1 This paper has been: Prepared By: Chief Finance Officer ☒ Reviewed By: Chief Officer ☒ Endorsed By: ☐ 3. RECOMMENDATIONS 3.1 It is recommended that the IJB PFA Committee: (1) Acknowledge the contents of the report. (2) Approve the proposed realignments and new reserves detailed in Appendix 1. (3) Approve the change to the percentage of risk based and contingency reserves to be held as detailed in section 8. 4. VARIATIONS TO DIRECTIONS 5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 It is essential for the long-term financial stability and the sustainability of the IJB that sufficient funds are held in reserve to manage unanticipated pressures from year to year. The requirement for financial reserves is acknowledged in statute and is part of a range of measures in place to ensure that section 106 public bodies do not over- commit themselves financially. Yes No N/A
Page 2
5.2 As detailed in the Financial Monitoring report being presented to this committee, the final outturn position for the Partnership for 2024/25 is an underspend of £10.716m which is inclusive of ring-fenced funding from Scottish Government of £0.614 to progress policy commitments and national priorities. It is therefore the responsibility of the Partnership to identify how this underspend should be utilised and allocated to reserve balances. 6. CONCLUSIONS 6.1 The IJB Reserves Strategy 2025/26 provides an opportunity to strengthen long-term financial sustainability by considering all current reserves to ensure those held are still required and sufficient to meet on-going pressures. The IJB Reserves Strategy 2025/26 will enable the IJB to balance current commitments whilst planning and addressing financial risks. 7. IJB RESERVES STRATEGY 2025/26 7.1 As detailed in the Table 1, the reserve balances as at 1 April 2025 were £75.524m. 7.2 In line with previous year practice, Health Services carried out a number of in year draw downs from reserves which resulted in a closing reserve balance of £64.386m. Full details of these are provided at Appendix 5 of the Financial Monitoring report being presented to this committee. 7.3 This closing position comprised £21.575m ring-fenced monies to enable the IJB to deliver on specific Scottish Government funded programmes, £15.843m earmarked reserves to support the delivery of projects which span financial years and the remaining balance of £27,418m, are risk-based and contingency reserves which are not held to meet any specific liability and offer the IJB some flexibility to deal with unforeseen events or emergencies. Table 1 LEAD SUMMARY Opening Balance as at 1 April 2025 Net Transfer from Reserves Revised Balance as at 31 March 2025 £m £m £m NHSL Ring-Fenced Reserves 24.114 (2.539) 21.575 NLC/NHSL Earmarked Reserves 20.975 (5.131) 15.843 NLC/NHSL Risk-Based Reserves 17.045 (2.731) 14.314 NHSL Contingency Reserves 13.390 (0.286) 13.104 Total 75.524 (10.687) 64.836 7.4 As part of the financial year end process a full review of all reserves held was completed by both partners to ensure the reserves held in 2025/26 are still required and sufficient to meet on-going pressures. 7.5 The purpose of this review was to: (i) draw down approved reserves to fund in year spend within social care services as agreed as part of the 2024/25 medium term financial plan. (ii) review all 2024/25 reserves to determine if they are still required for their original purpose. (iii) allocate the 2024/25 surplus.
Page 3
7.6 Following this review, a proposed realignment of reserves has been determined and is provided at Appendix 1 and summarised in Table 2. This includes the closure of £2.208m reserves which have been moved to contingency and risk based reserves, a transfer of £0.128m from contingency to create a new reserve within social care for school summer placements, an increase to previously created reserves of £10.869m, which includes augmenting the contingency and risk reserves, and the creation of 5 new reserves totalling £2.183m. Table 2 SUMMARY Proposed transfers from reserves New reserves awaiting IJB approval Proposed closure of reserves Proposed increase to reserves Total Movements £m £m £m £m £m Movements (0.128) 2.183 (2.208) 10.869 10.716 7.7 Of the £2.183m proposed new reserves, Health Services are requesting approval for £1.5m for mental health services and Social Care are requesting approval for £0.683m as follows: MHO Capacity Funding £0.388m Statutory Appropriate Adults £0.161m Participation & Engagement £0.006m Summer Placements £0.128m (this is a transfer from demand risk) 7.8 The revised structure of the reserves will continue to enable the IJB to meet its agreed strategic objectives and Scottish Government policy requirements. 7.9 The opening reserves for 2025/26 are summarised in Table 3 and included in detail at Appendix 2. Table 3 LEAD SUMMARY Opening Balance As At 1 April 2024 £m NHSL Ring-Fenced Reserves 14.838 NLC/NHSL Earmarked Reserves 25.060 NLC/NHSL Risk-Based Reserves 21.536 NHSL Contingency Reserves 14.119 NLC/NHSL Closed Reserves 0.000 Total 75.553
Page 4
8. RISK 8.1 In 2022/23, as part of the development of the financial plan and in line with the North Lanarkshire IJB Financial Plans it was approved that the risk-based and contingency reserves be established as a percentage of the mainstream financial envelope as follows: Year 2022/2023 2023 to 2030 Contingency Reserve % 3% 5% 8.2 However, given the financial challenges faced by the Partnership it is unlikely that underspends will be achieved in the coming years which would allow these reserves to grow to 5%. The opening balance represents 3.6%. It is therefore proposed to reduce the 5% target to 4% for the current financial planning period 2025/26 to 2027/28. Members should note that total reserves, inclusive of ringfenced and earmarked are 8% of the total financial envelope. 9. IMPLICATIONS 9.1 NATIONAL OUTCOMES People are able to look after and improve their own health and wellbeing and live in good health for longer ☐ People, including those with disabilities or long-term conditions, or who are frail, are able to live, as far as reasonably practicable, independently and at home or in a homely setting in their community ☐ People who use Health and Social Care Services have positive experiences of those services, and have dignity respected ☐ Health and Social Care Services are centred on helping to maintain or improve the quality of life of people who use those services ☐ Health and Social Care Services contribute to reducing health inequalities ☐ People who use Health and Social Care Services are safe from harm ☐ People who work in Health and Social Care Services feel engaged with the work they do and are supported to continuously improve the information, support, care, and treatment they provide ☐ Resources are used effectively and efficiently in the provision of Health and Social Care Services ☒ 9.2 ASSOCIATED MEASURE(S) Each partner is required to remain within their approved budgetary provision. 9.3 FINANCIAL This paper has been reviewed by Finance: Yes No N/A 9.4 RISK ASSESSMENT/RISK MANAGEMENT The strategic financial risks detailed in the IJB Risk Register has been updated where necessary and are included in a separate report to the IJB.
Page 5
Relevant Risk Register Details Current Risk Level Risk Owner Financial Challenges Very High Nicola Scott Prevention and Detection of Fraud, Bribery and/or Corruption Low Claire Rae National Set-Aside Budget High Claire Rae Hosted Services Medium Claire Rae Prescribing Activity and Costs Very High Claire Rae Pharmacy Pressures within Prison Service Very High Claire Rae Third and Voluntary Sector Low Claire Rae Ineffective Governance Arrangements Low Claire Rae 9.5 ENGAGEMENT & PARTICIPATION Please tick the engagement and participation objectives that link(s) with this piece of work and provide further details on the engagement and participation that was undertaken. Objectives Further details ☒ Involve stakeholders in the development work aimed at achieving the national outcomes The finance teams of both Partners have been actively involved in the reserves review. ☐ Provide stakeholders with information on how to get involved ☐ Ensure a diverse range of engagement and participation and opportunities are in place to suit different needs ☐ Measure how well we involve community stakeholders in the planning, design, and delivery of our services ☒ Provide regular feedback on how stakeholder engagement and participation is shaping and influencing service development and delivery Financial information is shared with stakeholders on a regular basis and is provided to the PFA and IJB on a quarterly basis. ☒ Provide support to enable stakeholder representatives to participate meaningfully and confidently at meetings ☐ Develop participation guidelines to ensure a common understanding and set of expectations for both stakeholders and partnership staff ☒ Support engagement planning and participation in localities, taking account of other engagement activity and local plans across the Community Planning Partnership IJB Financial Plan and Reserves Strategy aligns and supports the IJB Strategic Commissioning Plan to ensure robust financial monitoring and scrutiny. 9.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed:
Page 6
Yes No N/A 10. BACKGROUND PAPERS None. 11. APPENDICES HSCP Reserves Realignment Appendix 1 Opening Reserves at 1 April 2025 Appendix 2 Chief Finance Officer Members seeking further information about any aspect of this report, please contact Nicola Scott on telephone number 07581 007187.
Page 7
Appendix 1 HSCP RESERVES INCREASES AND REALIGNMENTS Net Movement Original Value Proposed Transfers from Reserves New reserves Awaiting IJB Approval Proposed Closure of Reserves Proposed Increase to Reserves Closing Value Comments £m £m £m £m £m £m £m NHSL Alcohol and Drug Partnership Funding 3.436 0.245 3.681 NHSL Area Wide Services - Refugees and Displaced Persons 0.077 0.046 0.123 NHSL Blood-Borne Viruses Services 0.155 0.163 0.318 NHSL Pharmacy Mental Health Recovery & NES Training 0.640 0.160 0.800 NHSL Frailty Nursing 0.001 1.714 1.715 NLC Carers Act 2018 - Support 2.426 0.178 2.604 NHSL Prescribing Fund 4.361 0.705 5.066 NHSL Contingency Balance Held By NHSL 13.104 1.012 14.116 NLC Social Care Demand 9.953 (0.128) 6.646 16.471 Move to school summer placements NHSL MH Funding 0.000 1.500 1.500 NLC MHO Capacity Funding 0.000 0.388 0.388 NLC Statutory Appropriate Adults 0.000 0.161 0.161 NLC Participation & Engagement Locality 0.000 0.006 0.006 NLC Sessional - School summer placements 0.000 0.128 0.128 Move from social care demand NHSL Children and Adolescent Mental Health Services 2.774 2.774 Move from ringfenced to earmarked NHSL Unscheduled Care Funding 2.790 2.790 Move from ringfenced to earmarked NHSL Mental Health Recovery Renewal - Facilities Projects 1.029 1.029 Move from ringfenced to earmarked NHSL Staff Wellbeing 0.254 0.254 Move from ringfenced to earmarked NLC Digital and IT Strategy Technology Improvements - SWIS 0.655 (0.571) 0.084 Partial closure NHSL Family Nurse Practitioner Funding 0.072 (0.072) 0.000 Close & move to contingency NHSL Mental Health Covid Clinicians (Cossette) 0.052 (0.052) (0.000) Close & move to contingency NHSL Mental Health Eating Disorders 0.036 (0.036) (0.000) Close & move to contingency NHSL Mental Health Wellbeing in Primary Care Services 0.148 (0.148) 0.000 Close & move to contingency NHSL PCR Prison Care Network Transforming Nursing Rolls 0.001 (0.001) 0.000 Close & move to contingency NHSL Specialist Doctor Contracts 0.194 (0.194) 0.000 Close & move to contingency NHSL Organisational Development Fund 0.260 (0.260) 0.000 Close & move to contingency NHSL Prisioner Healthcare - Transitional Project Band 8A 0.001 (0.001) (0.000) Close & move to contingency NHSL Regrading of Posts Including Backpay 0.250 (0.250) 0.000 Close & move to contingency NLC Social Care Contracting Staff within Quality Assurance 0.087 (0.087) (0.000) Close & move to social care demand risk NLC Financial Strategy - Changes to LA Services Muirpark 0.018 (0.018) 0.000 Close & move to social care demand risk NLC Digital and IT Strategy Technology Improvements - Other 0.314 (0.314) 0.000 Close & move to social care demand risk NLC Advocacy Services 0.019 (0.019) 0.000 Close & move to social care demand risk NLC Planned Date of Discharge - Discharge To Assess 0.052 (0.052) (0.000) Close & move to social care demand risk NLC Adaptations Fund 0.123 (0.123) 0.000 Close & move to social care demand risk NLC Adult Protection (share with C&F and NHSL) 0.010 (0.010) 0.000 Close & move to social care demand risk Movements (0.128) 2.183 (2.208) 10.869 Net Transfers & Increases 10.716
Page 8
Appendix 2 North Lanarkshire IJB Movement on Reserves Audit Trail NHSL & NLC Opening Balance As At 1 April 2025 Transfers To / From Reserves Drawdown from Reserves Revised Balance As At 31 March 2026 Movement in Reserves 2025/26 £m £m £m £m £m NHSL Alcohol and Drug Partnership Funding 3.681 3.681 0.000 1, 2, 4, 5 NHSL Area Wide Services - Refugees and Displaced Persons 0.123 0.123 0.000 1, 2, 4, 5 NHSL Blood-Borne Viruses Services 0.318 0.318 0.000 1, 2, 4, 5 NHSL Community Living Change Fund 0.055 0.055 0.000 1, 4, 5 NHSL District Nursing 0.373 0.373 0.000 1, 2, 3, 4, 5 NHSL Hospital at Home Services 0.915 0.915 0.000 1, 2, 4, 5 NHSL Learning Disabilities Health Checks 0.491 0.491 0.000 2, 3 NHSL Long Covid Pathways 0.289 0.289 0.000 2, 3, 4, 5 NHSL Mental Health Action 15 0.730 0.730 0.000 1, 2, 4, 5 NHSL Mental Health Diagnostic Support Service Dementia Post 1.057 1.057 0.000 1, 2, 3, 4, 5 NHSL Mental Health Digital Therapy Post 0.221 0.221 0.000 1, 2, 3, 4, 5 NHSL Mental Health Distress Brief Intervention 2.704 2.704 0.000 1, 2, 4, 5 NHSL North Planning Band 2-4 Posts & Multi-Disciplinary Teams 2.719 2.719 0.000 1, 2, 3, 4, 5 NHSL Pharmacy Mental Health Recovery & NES Training 0.800 0.800 0.000 1, 2, 3, 4, 5 NHSL School Nursing 0.274 0.274 0.000 1, 2, 3, 4, 5 NHSL Third Sector Initiatives To Improve Health 0.075 0.075 0.000 1, 2, 3, 4, 5 NHSL Upper GI Dietetics Band 4 0.014 0.014 0.000 3 14.838 0.000 0.000 14.838 0.000 Opening Balance As At 1 April 2025 Transfers To / From Reserves Drawdown from Reserves Revised Balance As At 31 March 2026 Movement in Reserves 2025/26 £m £m £m £m £m NHSL MH Funding 1.500 1.500 0.000 4 NHSL Children and Adolescent Mental Health Services 2.774 2.774 0.000 1, 2, 4, 5 NHSL Frailty Nursing 1.715 1.715 0.000 1, 2, 3, 4, 5 NHSL Unscheduled Care Funding 2.790 2.790 0.000 1, 2, 3, 4, 5 NHSL Mental Health Recovery Renewal - Facilities Projects 1.029 1.029 0.000 1, 2, 4, 5 NHSL Adult Social Care Winter Preparedness Fund 1.000 1.000 0.000 1, 2, 3, 4, 5 NHSL Staff Wellbeing 0.254 0.254 0.000 3 NHSL Minor Capital Works 1.027 1.027 0.000 3 NHSL Children and Adolescent Mental Health Services - Udston 0.268 0.268 0.000 4 NHSL Development of Chryston Community Health Clinic 0.212 0.212 0.000 1, 5 NHSL Kylepark Works 0.134 0.134 0.000 4, 5 NHSL HR Employability Team (2 year funding, 50:50 split between 0.087 0.087 0.000 3 NHSL Breast Feeding Team (2 year funding) 0.345 0.345 0.000 1, 2, 5 NHSL Dietetics Services - Double Running Costs 0.055 0.055 0.000 0 NHSL Health Inequalities - Screening 0.016 0.016 0.000 2 NHSL Health Visiting Students/Trainees 0.029 0.029 0.000 3 NHSL Mental Health Wards Window Replacement 0.650 0.650 0.000 2, 4 NHSL Neonatal & Paediatrics Dieteics Intervention (3 year funding) 0.293 0.293 0.000 1, 2, 5 NHSL Paediatric Diabetes Insulin Pumps and Additional Staff 0.538 0.538 0.000 1, 2, 3 NHSL Podiatry Services - Foot Screening 0.342 0.342 0.000 1, 2 NHSL Scottish Clinical Leadership Fellowship 0.060 0.060 0.000 3 NHSL Sexual Health Services - Long-Acting Reversible 0.297 0.297 0.000 1, 2 NHSL Staff Training Academy 0.335 0.335 0.000 3 NHSL Vulnerable and Complex Cases - Test of Change 0.501 0.501 0.000 5 NLC Business Case - Non-Recurring NLC Costs 0.309 0.309 0.000 1, 2, 3, 4, 5 NLC Carers Act 2018 - Support 2.604 2.604 0.000 1, 2, 4, 5 NLC Digital and IT Strategy Technology Improvements - Community Alarms 0.230 0.230 0.000 2, 3 NLC Digital and IT Strategy Technology Improvements - Home Support Scheduling System 3.332 3.332 0.000 2, 3 NLC Digital and IT Strategy Technology Improvements - SWIS 0.084 0.084 0.000 2, 3 NLC Home Support Resilience (2 year funding) 0.577 0.577 0.000 3, 4 NLC IJB Helpline (2 years funding) 0.137 0.137 0.000 1, 4, 5 NLC Mental Health Social Workers 2 x NL10 x 24 months 0.149 0.149 0.000 3, 4 NLC Staff Training Academy 0.704 0.704 0.000 3 NLC MHO Capacity Funding 0.388 0.388 0.000 4 NLC Statutory Appropriate Adults 0.161 0.161 0.000 1, 2, 5 NLC Participation & Engagement Locality 0.006 0.006 0.000 2 NLC Sessional - School summer placements 0.128 0.128 0.000 3 25.060 0.000 0.000 25.060 0.000 LEAD RING-FENCED RESERVES Ambition Statement & Performance TOTAL RING-FENCED RESERVES LEAD EARMARKED RESERVES Ambition Statement & Performance TOTAL EARMARKED RESERVES
Page 9
Appendix 2 Opening Balance As At 1 April 2024 Transfers To / From Reserves Drawdown from Reserves Revised Balance As At 31 March 2026 Movement in Reserves 2025/26 £m £m £m £m £m NHSL Prescribing Fund 5.066 5.066 0.000 2, 4 NLC Social Care Demand 16.470 16.470 0.000 1, 2, 3, 4, 5 21.536 0.000 0.000 21.536 0.000 Opening Balance As At 1 April 2024 Transfers To / From Reserves Drawdown from Reserves Revised Balance As At 31 March 2026 Movement in Reserves 2025/26 £m £m £m £m £m NHSL Contingency Balance Held By NHSL 14.119 14.119 0.000 1, 2, 3, 4, 5 14.119 0.000 0.000 14.119 0.000 75.553 0.000 0.000 75.553 0.000 KEY 1 2 3 4 5 RISK-BASED RESERVES Ambition Statement & Performance TOTAL RESERVES Ambition Statement & Performance Do the right thing first time. Increased focus on prevention, early intervention and tackling inequalities by working with communities and people. Develop and support a workforce for the future. Ambition Statement & Performance TOTAL CONTINGENCY FUND RESERVES TOTAL RISK-BASED RESERVES LEAD CONTINGENCY FUND RESERVES LEAD Improve mental health and wellbeing. Supporting people through a whole family approach.